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Tuesday, 10 July 2012

Cabinet endorses Padma Bridge with own funds

*DU to collect money for Padma Bridge

*Japan hopeful of new framework

Cabinet endorses Padma Bridge with own funds

The cabinet on Monday endorsed the prime minister’s proposal for beginning construction of the Padma Multi-purpose Bridge with self-finance without delay.
The government’s decision to construct the Padma Bridge with domestic funding came after global lender World Bank had cancelled its $1.2 billion credit for the mega project over corruption allegations in selection of consultants for supervising the construction work. 
Presiding over the weekly cabinet meeting at the secretariat, the prime minister, Sheikh Hasina, asked the finance division and the economic relations division to work out how much money would be required in foreign and local currencies and explore their possible sources for implementation of the $ 2.9 billion project. 
‘The cabinet has decided not to approach World Bank any further for review of its decision,’ cabinet secretary Mohammad Musharraf Hossain Bhuiyan told reporters after the meeting.
He said that the prime minister had directed all ministries to prioritise development projects and set aside funds for the Padma Bridge construction. The projects not much necessary now could be omitted from the current fiscal after scrutiny for saving funds for the bridge, Musharraf added. 
All cabinet members, the secretary said, backed the prime minister’s proposal for mobilising domestic funds to implement the Awami League government’s priority project to construct the 6.1 kilometres rail-cum-road bridge over the River Padma. 
‘We can discuss the matter again only if the World Bank realises its mistake. We will not initiate any talks on our own,’ the secretary said, referring to the cabinet decision. 
He said that a number of ministers had talked about the Padma Bridge issue and WB’s decision to scrap its funds for the project as the 2012-13 budget implementation strategy was placed in the cabinet for discussion. They termed arbitrary the WB’s decision to scrap the credit. 
On June 30, the World Bank cancelled its credit for the Padma Bridge saying it had proof of ‘corruption conspiracy’ involving Bangladeshi officials, executives of Canadian firm SNC- Lavalin and individuals. In September, the global lending agency withheld disbursement of the credit following allegations of corruption in the bidding process halting the implementation of the project.
Monday’s cabinet meeting, however, decided to appoint British company Halcrow, the second lowest bidder after Lavalin, for supervising implementation of the project, a senior minister told New Age. 
The prime minister also asked the bridge division for steps to begin construction of the main structure of the bridge soon. 
The cabinet was told that a total of $275 million was required in the current fiscal for the project. 
Finance minister AMA Muhith assured the cabinet that Bangladesh Bank alone could provide $1billion from its $13 billion reserve while the National Board of Revenue could raise its revenue target and thereby contribute to the project. 
The cabinet secretary said patriotic people, including expatriates, were willing to contribute to the project.
He said funds would be mobilised from domestic sources, including banks and insurances after examining their possible implications on the country’s overall economy. 
The government would continue negotiations with three co-financers – Asian Development Bank, Islamic Development Bank and Japan International Cooperation Agency – for funding the project, he said.
The prime minister, Sheikh Hasina, on Sunday rolled out a road map for construction of the Padma bridge and told parliament that work on the mega project would begin soon by mobilising internal resources and with assistance from the people of the country.
In her closing speech at the 13th session of parliament, she said the government would spend a total of Tk 22.55 thousand crore on the project. 
Hasina also blamed the World Bank for wasting time over the Padma Bridge project and asked the finance minister to explore ways for realising compensation from the bank for delaying the project by more than one and a half years.
She said the government might be forced to drop some other development projects to build the bridge that would connect the south-west and central regions with capital Dhaka and the port city of Chittagong.

DU to collect money for Padma Bridge

Dhaka University authorities would collect money from its teachers, students and officers for the Padma Bridge project, the vice chancellor AAMS Arefin Siddique said on Monday.
‘We will soon hold a meeting to collect money from the teachers, students and officers according to their capacity,’ the vice chancellor told New Age.
‘We want to play as role in the Padma Bridge construction,’ he said.
He said that DU always played a role during difficult times facing the nation.
‘It’s a big challenge for the nation to build the bridge,’ he said.
Earlier in the day, 
the students of the management department donated Tk 6,500, they had collected, to the vice-chancellor.
Inspired by a teacher in the class room, they collected the money instantly.
Quoting from a speech of the country’s founding president Sheikh Mujibur Rahman, Management Department professor 
Md Ataur Rahman, had urged the students of 16th batch to contribute to the project.
Business Faculty dean Jamal Uddin Ahmed, management professors Ataur Rahman and Hashibur Rashid and soil, water and environment professor SM Enamul Kabir, among others, were present at the occasion.

Japan hopeful of new framework

Japan thinks the Padma bridge project could be undertaken under a new framework of donor arrangement now that the World Bank has cancelled its funding commitment in the project.
Japan's Deputy Prime Minister Katsuya Okada conveyed the message when Foreign Minister Dipu Moni called on him in Tokyo yesterday.

Okada further assured that Japan would pursue the donor groups including the Asian Development Bank to embark on a negotiated settlement in respect of the project, said a foreign ministry press release from Tokyo.

Meanwhile in Dhaka, the cabinet yesterday decided that the government would not request the WB to reconsider its decision to cancel the Padma bridge loan. However, it would be open to talks if the global lender realised its mistake and wanted to review its decision.

“The government firmly believes it did not make any mistake. The World Bank has made an unjustified decision. Discussions can take place if it realises its mistake and intends to review its decision, but the government will not make any request to it at this moment,” Cabinet Secretary Mosharraf Hossain Bhuiyan told journalists after a cabinet meeting.

At the meeting chaired by Prime Minister Sheikh Hasina, the cabinet also decided to mobilise both internal and external resources for the multipurpose bridge.

Mosharraf said the government would welcome the co-financers -- ADB, Jica and Islamic Development Bank -- if they showed interest in financing the project. “We hope to get positive response from them.”

The WB cancelled its $1.2 billion credit for Padma bridge project on June 29, claiming it has proof of a corruption conspiracy involving Bangladeshi officials, executives of Canadian firm SNC-Lavalin and individuals.

In Japan to attend the international conference on Afghanistan, the Bangladesh foreign minister also met her Japanese counterpart Koichiro Gemba and Jica President Akihiko Tanaka separately.

At the meeting with Gemba, Dipu Moni reiterated Dhaka's firm resolve to initiate the Padma bridge project on its own and sought Tokyo's support in this regard as a "trusted friend and partner".

Highlighting the measures taken by the government to ensure absolute transparency in the project, she said the government was ready to undertake the project with its own resources, but it would appreciate if countries like Japan could extend their support.

In response, Gemba confirmed that the Japan government understands the feelings of the people of Bangladesh with respect to the significance of the Padma bridge project.

He reaffirmed that Japan would pursue the possibility of funding the project along with other bilateral and multilateral donor agencies.

Later, meeting top Jica officials, Dipu Moni explained Bangladesh's position regarding the WB's cancellation of the Padma bridge loan. She told them that the bank neither followed the due process nor gave any credible evidence about alleged corruption in the project.

Apart from Jica President Akihiko Tanaka, the meeting was attended by Jica Director General Nakahara Masataka, Jica Chief Representative in Bangladesh Toda Takao and Jica Director for South Asia Division Ichiguchi Tomohide.

Dipu Moni said that the government was determined to start work of the Padma bridge without further delay, and that it would ensure "zero tolerance" for corruption in executing the project.

The foreign minister urged the Japan government to remain "steadfast in its pledge for continuation of the project".

The Jica president expressed regret over the WB's decision.

He said they were satisfied with Dhaka's firm determination to go ahead with the project and commitment to ensuring transparency and accountability in the process.

Tanaka also mentioned that Jica, as the implementing agency, would consult all other government agencies in Japan to further discuss the possibilities of "continuation of funding the project" under the new framework of arrangements.

The Padma bridge issue dominated the cabinet meeting, though it was not on the day's agenda.

Finance Minister AMA Muhith made a presentation on the project.

Cabinet Secretary Mosharraf Hossain Bhuiyan said the bridge's construction would start primarily with the country's own resources, and then the government would start looking for other sources.

“The prime minister has instructed the ministries to be selective in implementing projects. She said not all allocations are needed at once to implement the projects. In this way, we can save some money this year and channel those to the Padma bridge project,” he said.

Mosharraf said people from all walks of life had shown interest in contributing to the project and the cabinet decided to explore all options available.

“Since we have to import construction materials with foreign currency, we need to mobilise resources in terms of foreign exchange. Many expatriate Bangladeshis have expressed their willingness to contribute to the project. We can get a large chunk of their remittance.”

He said $275 million would be required this year to start the construction work.

“The prime minister said $1 billion can easily be used from the foreign exchange reserve.” The government can also issue some bonds, said Mosharraf.

On mobilisation of external resources, he said the National Board of Revenue can also take steps in this regard.

He said the Finance Division and the Economic Relations Division will work out how much foreign exchange will be required for the project.

Wishing anonymity, a minister told The Daily Star the government had got some proposals for loans at 4 percent interest. Officials were now at talks to bring down the interest rate to 3 percent.